Under periodic system of recording inventory, purchase of inventory is debited to _______________.

• A) Purchase account
• B) Debtors account
• C) Inventory purchase account
• D) Bank account

Which of the following should be credited when production is completed in manufacturing concern?

• A) Finished goods account
• B) Work in process account
• C) Material account
• D) FOH account

A minor repair to a photocopy machine was paid in cash. Correct entry was made to cash account but no entry was made to other account. What will be the credit effect of journal entry to rectify this error, if there is suspense account in trial balance?

• A) Suspense account
• B) Cash account
• C) Photocopy machine repair account
• D) Photocopy machine account

Under IAS 2, material available for use in the production process is known as:

• A) Expenses
• B) Costs
• C) Fixed assets
• D) Inventories

When the sum of more than one error cancels the accounting effect of each other, it is called:

• A) Error of omission
• B) Compensating error
• C) Error of principle
• D) Error of original entry

Wood used to make a table in manufacturing concern is:

• A) Finished goods
• B) Stock in trade
• C) Raw material
• D) Work in process

If cost of equipment is Rs. 108.000. useful life is 10 years and its residual value is Rs. 8.000. Then Deprecation for the year using straight line method is ____________.

• A) Rs. 100.000
• B) Rs. 10.800
• C) Rs. 10.000
• D) Rs. 800

If cost of a plant is Rs. 90.000. total estimated output is 30.000 units and units produced during year 2019 are 7.000. Then calculate deprecation for year 2019 if deprecation rate per unit is Rs. 3.

• A) Rs. 270.000
• B) Rs. 90.000
• C) Rs. 21.000
• D) Rs. 180.000

If cost of a plant is Rs. 90.000. total estimated hours are 11.000 and number of hours worked during year 2019 are 8.000. Then calculate depreciation for year 2019 if deprecation rate per hour is Rs. 6.

• A) Rs. 30.000
• B) Rs. 48.000
• C) Rs. 540.000
• D) Rs. 66.000

If cost of equipment is Rs. 108.000. useful life is 10 years and its residual value is Rs. 8.000. Then Deprecation for the 3rd year using straight line method is ____________.

• A) Rs. 10.000
• B) Rs. 9.800
• C) Rs. 8.820
• D) Rs. 8.000

ABC Corporation has recently purchased a used production plant. Its purchase price is Rs. 100.000; cost incurred to remove plant from site Rs. 4.000 and installation cost is Rs. 5.000. It will be initially recognized in books at Rs. ___________.

• A) Rs. 100.000
• B) Rs. 104.000
• C) Rs. 105.000
• D) Rs. 109.000

In case of writing off debtors as bad debt. ____________ is debited.

• A) Provision account
• B) Receivable account
• C) Payable account
• D) Bad debts account

When the sum of more than one error cancels the accounting effect of each other. it is called:

• A) Compensating error
• B) Error of omission
• C) Error of original entry
• D) Error of principle

While preparing a Debtors Control Account. Debit side posted items cause:

• A) Increase in debtors’ balance
• B) Both increase and decrease in debtors’ balance
• C) Decrease in debtors’ balance
• D) Increase in creditors’ balance

Mostly. control accounts are maintained for:

• A) All of the given options
• B) Trade receivables
• C) Trade payables
• D) Inventory

Which of the following statement is true regarding covariance?

• A) The range of covariance lies between -1 to +1
• B) The covariance is always positive because it is a squared value
• C) The covariance can never be negative
• D) The covariance can take on any negative, positive or a zero value

Which of the following is correct formula for per-unit contribution margin?

• A) Fixed cost / Contribution margin per unit
• B) Total contribution margin/ Sales
• C) Sales / Contribution margin per unit
• D) Sales per unit - Variable cost per unit

Assume, ABC Company was following conservative working capital policy and now it wants to move to an aggressive policy. As a result of this shift in policy, the company should expect which of the following?

• A) Both risk and liquidity will increase
• B) Expected profitability will increase, while risk will decrease
• C) Both risk and profitability will decrease
• D) Decrease in liquidity, while expected profitability will increase

Market risk is also known as:

• A) All of the above given options
• B) Volatility risk
• C) Systematic risk
• D) Unavoidable risk

Which of the following statement is TRUE in regards to aggressive approach to financing working capital?

• A) Financing the long term needs of the business through short term debt
• B) Financing the short term needs of the business through long term debt
• C) Financing the inventory of the business through long term debt
• D) Financing the seasonal needs of the business through short term debt